Transient Occupancy Tax in San Diego – Airbnb Overcharging Visitors

Airbnb has collected and remitted Transient Occupancy Taxes (TOT) for hosts in the City of San Diego since July 2015, making collection of these taxes easier for both hosts and the City Treasurer.  Per the City TOT FAQs, TOT is charged for the following stays:

“If you are renting a room for less than one calendar month, the rental is subject to the TOT.”

The exact rules of the TOT can be found in the San Diego Municipal Code (SDMC) §35.0101.  Here the City states there is a TOT:

“It is the purpose and intent of the City Council that there shall be imposed a tax on Transients”
And to whom that tax applies in the definition for Transient:
“Transient” means any Person who exercises Occupancy, or is entitled to Occupancy, by reason of concession, permit, right of access, license, or other agreement for a period of less than one (1) month. A month is defined as the period of consecutive days from the first calendar day of Occupancy in any month to the same calendar day in the next month following, or the last day of  the next month following if no corresponding calendar day exists.”
This definition does not rely on a strict number of days to qualify as a month – it is dependent on the number of days in each month.  A stay of 28 days (or 29 or 30) in February (of a non Leap Year) are not subject to TOT  but a stay of those durations in July would have TOT since July has 31 days.

The City of San Diego TOT is 10.5% for small short-term rental operators, those with less than 70 rooms.  An additional TMD assessment used to apply to small operators but now applies to large operators only, effective September 1, 2016. Rates and additional information available on City website for TOT.

Airbnb has not correctly implemented the definition of a calendar month in collecting the TOT in San Diego and instead is applying the tax to any stays of 30 days or less.  Per an email from Airbnb this week the company is collecting “10.5% of the listing price including any cleaning fee for reservations 30 nights and shorter”.

The Airbnb site can be used to see how the TOT calculation is being applied by entering dates and then clicking a property to see the reservations details, where the TOT is listed as a separate line as “Occupancy taxes and fees”.  Below are a few sample results showing the TOT being charged when it should not be.  The erroneous TOT charges are for hundreds of dollars each. I also called the TOT help phone number at the City (619-615-1530) to confirm that TOT should not be applied to these specific date scenarios.

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I’m a big fan of Airbnb both as a host and as a guest.  Having the company collect and remit TOT for hosts is a nice convenience, as previously short-term rental hosts on the platform had to complete and file a monthly return to report TOT.  The incorrect application of the TOT rules and resulting overcharging of customers is not right and needs to be corrected.  I’ve reached out to the company a number of times requesting this and either due to a difference of understanding or other reasons a correction has not been made. I’m hopeful that this article may result in corrective action being taken.

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John P Anderson

I'm a Kansas native living in San Diego. I enjoy learning about environmental issues and connecting with good people that want to make the world a better place. Cheers!